Sigma could take advantage of its expanding ore body, low cash costs of production, above-average lithium grades and reduced carbon emissions to establish itself as a midstream powerhouse by producing lithium sulfate, the CEO said during a call with investors.
“Our concentrate has higher purity and behaves better in calcination [so yields can be higher],” Cabral added. “We can have a cost advantage of $2,000-3,000 [per tonne] if we make sulfate [at our Grota do Cirilo project], for example.”
But for now, Sigma will focus on deciding when and how to expand production.
Phase 1 of the Grota do Cirilo project, located in the southeastern Brazilian state of Minas Gerais, started operating in 2023, but lithium prices have since plummeted.
Fastmarkets’ twice-weekly price assessment for spodumene min 6% Li2O, spot price, cif China was $800-900 per tonne on Friday February 2, stable since January 24 but down by $100 per tonne month on month and by $6,200-6,600 per tonne year on year.
“We are expanding with financial discipline,” Cabral said. “In 2020, when we were in the engineering phase [for Grota do Cirilo and prices also fell], we were at a crossroads. And here we are today… having even captured the tail end of a ‘supercycle’ for lithium [in terms of revenue].”
“It is by taking the long view that you win in this industry,” she added.
This also means that the company needs to prepare for when lithium prices rise again, which would justify investing amid depressed market conditions, according to Sigma executives.
“When the cycle turns back, we will be in a better position,” Matthew DeYoe, executive vice president for corporate affairs and strategic development, said during the investor call. “This company is a growth story, and we can drive value for ourselves and strategic partners [by expanding].”
Increasing capacity would also not be hard to fund, especially because of the company’s carbon-neutral production and its other sustainability credentials, the CEO said.
“There is no shortage of funding for low-cost, resilient, critical mineral projects in the world,” Cabral said.
Sigma’s drilling campaign in 2023 led to a 27% increase in audited mineral resources to 109 million tonnes from 85.6 million tonnes a year earlier; that total includes 94.3 million tonnes of measured and indicated resources and 14.6 million tonnes of inferred resources.
This made the Brazil-operated, Toronto- and NASDAQ-listed producer the world’s fourth-largest pre-chemical lithium beneficiation industrial complex currently in operation, the company said in a press release.
“It is an honor to now be joining the Australian club,” the CEO said; the three largest lithium mines in the world are in Western Australia.
The world’s largest lithium mine mentioned by Sigma during the presentation is Greenbushes, owned by China-based Tianqi Lithium Industries and US-based Albemarle Corp. The second-largest mine is Pilbara Minerals’ Pilgangoora mine, and the third-largest is Woodgina, which is owned by Australian company Mineral Resources and Albemarle.
Sigma estimated that, after further exploration of the ore bodies in the areas that will serve future phases of the project, its resources could total 150 million tonnes.
Grota do Cirilo currently has capacity to produce 270,000 tonnes per year of spodumene concentrate, or 36,700 tpy lithium carbon equivalent (LCE). Phases 2 and 3 of the project are scheduled to bring capacity to 766,000 tpy, or 104,200 tpy of LCE.
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